Editorial: Why California needs a student loan ‘bill of rights’

Northern Arizona University freshman Tyler Dowden, 18, speaks during a news conference on Capitol Hill in 2012 to protest student loan policies. The federal government last May pulled back from its oversight role.

(AP)

Given that the federal government has limited its student loan oversight, states need to step up.

The size of America’s student-loan problem is a matter of dispute. As Bloomberg News columnist Michael R. Strain wrote this week, there is evidence that students face no more difficulty in paying off their loans then a generation ago. Nonetheless, the anecdotal stories about young people blithely signing up for tens of thousands of dollars in college loans without thinking through the consequences are legion — as are the stories of financial heartache from the young women and men who need decades to pay off their debts.

This is why Assembly Bill 376 by Assemblyman Mark Stone, D-Scotts Valley, makes sense. The “Student Borrower Bill of Rights” would establish state oversight of lenders to ensure they are providing full information to borrowers, including on early repayment options. It would create the position of “California Student Borrower Advocate” to monitor lenders to ensure they behave transparently and ethically. The bill was passed unanimously Monday by the Assembly Banking and Finance Committee.

Such a state law is acutely needed in light of the Trump administration’s still stunning decision from last May to close the office in the Consumer Financial Protection Bureau that monitored student loan issues on the grounds that the bureau should only do what is required by law. This narrow, legalistic view doesn’t help the 44 million-plus Americans with student loans. They need protection. It’s appropriate and necessary for states to play this role.